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Great news and best of luck with the new venture. Why shouldn't you turn so much of your time and passion already spent into something that in the long run could reward you financially. It makes good business sense.
If ever you need any ideas for advertising/marketing/content creation please feel free to give me a shout :)
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David
Have you considered / is it feasible / would it work to include 'policing' by the forum. For example, in the case of trolling, etc. the problem here currently is dealt with by notifying the mods. Could this be done by a voting style system whereby, if enough forumites hit the 'coventry' button, the offending individual gets kicked off / sidelined or whatever?
This could / would make the forums more self sufficient?I am considering something like that... but will think about it more in the future when the basics are all done.
The thought on it so far is that the forum elders should have more influence in nuking newer members, and newer members should be more vulnerable to it.
But then I think of DJ and the reverse seems a better idea.
Which means... I have no neat answer, so will wait until one appears.
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This might be of interest to you Sir, or others
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Brilliant news VB - i have extolled the virtues of the forum to owners of others i frequent, and you deserve to make a success out of your skill.
Love the idea of share options/or the ability for us monkeys to help invest in start up costs, if for no other reason than i would like to give back and help you out for creating something that has helped me and others so much.
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The reality of what I've done is starting to sink in.
Uh-oh... how on earth will I survive if I cannot pay the rent or bills for 6 months?
It's weird right now, I remember a Mozart track in which there is a low note and a high note simultaneously with nothing in between.
That's how my emotions are.
I'm as high as a kite with excitement and optimism at what I'm going to be working on.
And simultaneously so low with the reality that I have just imploded my finances and if a 2% chance on YCombinator fails (98% likely), that I will within 2 months have no means to keep the roof over the head, or put food on the table.
And it's weird... what the hell do I tell the taxman? "I quite work to do this thing I need to do, but no I have no income, but I am working and so I can't claim benefits as I'm not job seeking.". I just don't know how that works, the system isn't made for people who want to try and create new businesses like that.
You're not really supposed to go and try to do something with such a high level of uncertainty. You're supposed to have a plan, formulated to the nth degree, considering every small detail... to do something that has already been proven. Like starting a cafe or becoming a plumber. You're really not supposed to say: I believe this can work, that creating a network of community sites can be profitable, but it will take some time to do... oh and we have no money.
I remember this though, this rollercoaster of emotions. It's not unusual. But still... how on Earth do I feed myself and keep the roof if we don't get that early investment?
Fun times.
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David, morally you should be able to claim job seekers allowance since you are endeavouring to work towards earning an income from something something productive that may even provide jobs for other. (Job creators allowance)
Are there grants you could apply for? Have you put together a costed business plan that you could tout to banks for business start up/development loans, register as a CIC (Community interest company)?
Or even take people up from here on offers to buy bonds/shares if you set yourself up as a company.
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On a business plan... it would be impossible for us to truthfully make one. It's a real startup, rather than a new business based on the template of an already successful one.
What that means is that there is so much uncertainty in the product, the numbers... that it may well be the case that the entire idea is subject to extreme learning (validating the assumptions of the business) to the point that what we eventually make is different from what we're describing today.
You only need look at Twitter for this kind of thing... Twitter was not the intent, it was just a micro-blogging platform that could fit into SMS messages that the guys at a company could use to manage their team. Twitter couldn't have had a business plan, and if it had one, it would've been rejected everywhere.
Not that I seek to hide behind the idea of being destined to be successful... the default state for true startups (untested new businesses) is death.
It's very hard to sell death to a bank and ask for their money on the promise of life when death is so plainly evident.
So banks and traditional investment is out... on the table is angel investment and early low-level venture capitalism. But this is high risk and takes time... so it doesn't solve in any comfortable way the question of "What do we feed ourselves with, come January?".
Setting up as a community interest, taking money for bonds/shares... these are both highly problematic paths. Both declare that we need to do what we promise, but as stated already we're highly uncertain of the exact form of product that we'll be producing, so couldn't promise to do something.
On taking money for shares/bonds... this also could really hurt our ability to get the investment we actually seek (VC money).
Ultimately... this is all akin to learning how to become a trapeze artist without the use of a safety net. This is why the default state for all startups is death... only a very few survive the learning experience to begin with.
The question in my mind is less: Is the idea sound, will the company work... it will, in the worst case scenario only a small scale, but it will.
The question is more: Until it is able to feed me, how do I feed myself?
That's the scary one I'm now faced with (and the 69p of soup on the table in front of me says that my lunches are now a little more affordable from having this realisation).
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Be sensible about selling possessions if you need to - don't leave it up to the last minute so that you have to sell it cheap and also think about seasonal variations - ie sell spare mudguards and lights now and short sleaved jerseys/bikes in mid/late spring. Make a list of things that are not irreplaceable.
Speak to an accountant/business advisor about grants/subsidies and definetely look at the stock/shares idea,or look at setting up a wefund project : http://www.wefund.com/funding/community.
You may want to think about setting aside say a day a week/fortnight to raise cash from non forum activities?
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How about a food drive for our Dear Leader?
I'm serious: we all give a few dry goods, tins etc and The New Bill Gates (TNBG) can get on with doing whatever it is he is doing.
I can't organise this - I fell down a hole in my own kitchen floor yesterday, it would not go well - but someone can. -
What time period do you predict before you begin to get any returns from your project?
What kind of money do you need to live on for that period?
If you can quantify that and say you need, say £1000 a month could you get loans from family and friends who believe in you (And you do have a track record of getting things up and running)?
Is this dev work going to be full time? You may feel less conflicted about claiming Job seekers allowance even if you were only seeking very part time work to tide you through this period -
The last thing I wanted is to become a charity case.
Although... if anyone needs a shit-hot developer, network assistant (wiring an office) or such things.
Then I can offer that service 1 or 2 days a week.
It will be below market rate, but not free/cheap as clearly I'm attempting to earn enough through this work for myself and my girl to live.
Basically: Any small companies need access to someone who can do almost anything with computers, printers, networks, web sites, scripting, automation, etc?
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Not charity...
I will LOAN you £50 a month pegged to inflation index for 6 months and I hardly know you.I'm sure you know many more people better and richer than me who would make a similar or more generous offer if they knew your need.We could all buy bonds in him rather than the venture? Given that we know the site "works" in its current form, we should be able to fall back to the current state, whereas a starving benevolent dictator is not a particularly effective form of government.
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The last thing I wanted is to become a charity case.
Although... if anyone needs a shit-hot developer, network assistant (wiring an office) or such things.
Then I can offer that service 1 or 2 days a week.
It will be below market rate, but not free/cheap as clearly I'm attempting to earn enough through this work for myself and my girl to live.
Basically: Any small companies need access to someone who can do almost anything with computers, printers, networks, web sites, scripting, automation, etc?
Ah hurumpf, I might actually know of some one who needs their entire back end/content management system rewired. What do you need to know to think of a price?
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VB - your start up will work, it is a great idea, a huge idea, but it will work.
There are lots of VC-type people who would be interested in financing this, I am sure.
BUT You probably have more people here who would give £ than you realise. My figures are complete guesses, and may be way off - I don't know how many active users there are, but I believe that there are a lot who don't go to events but would give/lend/invest £ (eg me). You're in a very lucky position where thousands of people know who you are, what you're capable of and what you've done so far - you could harness this good will.
You'll probably get better interest rates and more freedom if you used lfgss money rather than VC investment.
This could be **equity (ordinary shares). **As an investor this would be my preference, as I think you'll succeed with this, and I would like to take the risk:reward - if it all fails, I just lose my £. I understand your reluctance as it could put off VC investment, however, as someone suggested, if this was dilutable, so it became worth less over time as you got VC investment in place, that might work. Also, if a new "We Believe in VB Limited" company was formed, people could invest in that, and it could invest in you, so that VC investors see you have just one minority investor.
This could be preference shares/loan notes. These are effectively a loan, but you normally don't pay out interest on them until they mature, the interest just rolls up and gets paid with the capital at the end. This gives certainty to investors that they get £ back, but they don't get to participate in upside. Also, if you take out normal loans / bonds, they get paid back before these pref shares (particularly if it doesn't work out), so there is a bit of risk for investors.
It could be bonds. These are just loans from us to you, least risky for us, but smallest return. I am sure that you could raise £ in this way with a much lower interest than £ raised commercially. This would probably not bother VC investors, as long as you were making enough £ to make the repayments.
e.g. - applicable to all three.
10 people x £1000
100 x £500
1000 x £100
5000 x £10gives £210,000 from 6110 people. Is that completely unrealistic? I don't know.
I don't know how many people you need to be paying full time for say 2 years to keep it going, but that's 4 people on £26k
PS I'm not techy and I understood your initial post (I think...)
PPS Two people were willing to give £500+ to charity just to be user ID #2.... -
+1 to lfgss funding....and its very tidy, the as community that you have helped to spawn, helps you to grow the bigger idea. synergy at work.
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Theres good money to be made out of doing/designing networks for high end residential projects - last consultant i used we payed about 5 grand for what must have been a couple of days work
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About
LFGSS: Turning a hobby into a technology startup
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@Velocio
David
Have you considered / is it feasible / would it work to include 'policing' by the forum. For example, in the case of trolling, etc. the problem here currently is dealt with by notifying the mods. Could this be done by a voting style system whereby, if enough forumites hit the 'coventry' button, the offending individual gets kicked off / sidelined or whatever?
This could / would make the forums more self sufficient?